Stock Market, Analysts Bullish On Strong Take-Two Performance
Thursday's announcement of quarterly and fiscal year profits for Take-Two
-- a rarity in a year without a major Grand Theft Auto
-- have pushed the company's stock price significantly higher today.
Shares in the publisher finished the day at $12.93 on the New York Stock Exchange, up 8.29 percent from yesterday's close after briefly touching on gains above 14 percent (to $13.62) earlier in the day.
The increase comes after what the company called a "milestone year"
, with three straight profitable quarters leading to annual net income of $53.8 million, significantly exceeding expectations set by analysts and internal guidance.
The profits for the fiscal year were especially significant given the absence of a standalone Grand Theft Auto
release during the period. Such a release had been necessary for a company-wide annual profit in recent years.
Analysts differed on whether Take-Two's next fiscal year would be similarly GTA
-free. Cowen and Company's Doug Creutz and Kaufman Bros.' Todd Mitchell said they expected the next game in the series for the 2013 fiscal year (which starts in April, 2012).
But Wedbush Morgan analyst Michael Pachter said he expected the game in "either late 2011 or early 2012," matching previous expectations set by Janco Partners' Mike Hickey
But analysts seemed agreed that Take-Two's future strong performance seems like a good bet. "The company appears to be on a path to consistent profitability," Pachter in a research note. "We ... think the company can generate sustainable earnings growth in each year if release timing is right."
"Investor's confidence in the company is rising," Mitchell said in his own research note. "There is no dispute Take-Two makes good games. It is also becoming increasingly evident it can do this profitably. The question now is how often and to what degree?"
In a July interview with Gamasutra
, Take-Two VP Alan Lewis said the company aims to release one new IP each year, though they don't let that desire lead to products released before they've had sufficient development time.